Posted on: September 29, 2024, 06:38h.
Last updated on: September 29, 2024, 06:38h.
Casino resorts in the United Arab Emirates (UAE) could potentially notch annual gross gaming revenue (GGR) of $3 billion to $5 billion perhaps rivaling Singapore on that basis, according to recent estimates by Morgan Stanley.
The bank didn’t say how many gaming venues it would take to get to $5 billion. UAE regulators haven’t officially approved casino gaming, but Wynn Resorts (NASDAQ: WYNN) earlier this year broke ground on its Wynn Al Marjan Island integrated resort in Ras Al Khaimah (RAK). That’s expected to be the first regulated casino hotel in the Arab world. More recently, MGM Resorts International (NYSE: MGM) said it will pursue a gaming license in Abu Dhabi.
We benchmark RAK and its closest large international airport/city Dubai to Singapore,” noted Morgan Stanley analysts. “Bottom-line, RAK/Dubai appear to offer similar demand drivers to Singapore, which could point to outsized return on invested capital.”
The analysts added the Dubai/RAK have some advantages over Singapore, including more population, higher levels of tourism, and a deeper roster of five-star hotels.
How UAE Could Become $5 Billion Casino Market
The $3 billion to $5 billion GGR forecast offered up by Morgan Stanley is possible. Other research firms have previously estimated Wynn Al Marjan Island, which is scheduled to open in early 2027, could notch $1.4 billion in yearly GGR when it fully ramps up.
That implies the Wynn property alone could cover almost half of $3 billion, but to get there and beyond, other factors come into play. Those include contributions from MGM’s casino, the total amount of gaming venues permitted in UAE, and whether or not locals are permitted to wager.
Morgan Stanley pointed out that it’s possible that as the gaming regulatory process moves along, UAE will eventually approve more integrate resorts than the two found in Singapore, but the total number of gaming venues the emirates will eventually have isn’t yet known. Last year, MGM CEO Bill Hornbuckle said the figure could be as high as four over the long-term.
Morgan Stanley added that the bulk of international visitors to UAE casinos would likely hail from Europe and Southern Asia.
More Singapore Comparisons for UAE Casinos
Perhaps integral to the GGR fate of UAE casinos is whether or not locals are permitted to bet at the properties. The emirates are home to vast oil wealth and while the number of millionaires there is lower than it is in Singapore, UAE’s population growth of ultra-high net worth individuals has outpaced that of Singapore in recent years, noted Morgan Stanley.
The bank added that UAE casinos are unlikely to cannibalize rival properties in other regions, highlighting the example of the debuts of the two integrated resorts in Singapore.
“Historically, we have seen limited impact of new gaming markets cannibalising existing ones. For example, Singapore opened two of its casinos in 2010 — with 2011 GGR of US$6 billion — but Macau still saw a US$9.9 billion increase (+42 percent year-on-year) in its GGR in 2011,” wrote the analysts.
